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Principles and practices for ethical business

A few months ago I reported upon a presentation that I gave to the business students at Peter Jones’ National Enterprise Academy in Manchester.

At the end of the presentation on Business Ethics and Values, a subject close to my heart and head under the work that I do with Ethiconomics TM, I left 15 minutes or so for a question and answer session. The session actually extended to over 40 minutes. This I put down to the genuine interest of the students in the practical engagement and delivery of Ethiconomics into business strategy (and possibly a little nod to the delivery of the content itself – excuse the promotion but my mentor would insist!). Either way there was an engaged audience of young, exuberant and mature young entrepreneurs prepared to miss some of their lunch time to interact on the subject.

The quality of their questions in general was testament to their interest in business ethics and the standard of general business studies education that the Academy provided. It was the penultimate question that nearly caught me out and not because of its abstractly theoretical nature on some hitherto non-considered topic but almost the exact opposite. I was asked which were the top 3 topics (An A-Z Introduction to Ethiconomics has over 100 personal values and business principles topics) that I would recommend and that I also deployed most diligently. The first part of the question was relatively straightforward to respond to but I did have to make a mental check that I was “diligently deploying” the principle into practice.

My first topic was Authenticity. No surprise to anyone that has worked with me over the years,

“Even the fear of death is nothing compared to the fear of not having lived authentically and fully.” Frances Moore Lappe,

Is very much how I personally feel about Authenticity. I had no problem with that element at least. The subsequent discussion left me with a strong impression. The topic was received with vigour and open minds. They instinctively recognised the power of acting authentically and of how today’s World of social media and instant information made it even more important to behave consistently and with integrity. Even as they forge their respective ways into the business and commercial world they were already conscious that behaviour is increasingly visible and that reputation of the individual and the company is becoming increasingly representative of brand, niche and sustainable business. Their own example was one of the Disney Corporation who’s mission statement is something along the lines of “To Make People Happy” but who have (allegedly – they also have a reputation for being mercilessly litigious!) the highest suicide rate amongst employees in the business world! A glorious manifestation of inauthentic values at work where clearly the value of the customer (and the cheque?) is strongly favoured over the value/values of the employees. Effective and successful if only measured in terms of money but maybe not so successful in terms of employees engagement and fulfilment.

The second topic that I chose was that of Affluence. I requested that they begin to consider their respective affluence, and presumed search for more, in terms other than just financial. This too was well received – albeit initially with a few raised eyebrows! The point that I made had two distinct elements; the first, that we have been in search of the Yankee dollar at the exclusion of the environment, personal contentment and community engagement for too long. It is becoming increasingly clear that this has had its day, shot its bolt and ran its course. If you don’t believe me, ask anyone in Greece or Ireland or vast areas of the US, or even many regions in the UK. The perspective of the students, and I want to reaffirm their knowledge and maturity in these matters, was again refreshingly open-minded and practical.

They absolutely understood the value of community, the need to protect natural resources and to reduce waste. They saw these in ecological, personal AND social contexts and very much understood that the change in World economic balance toward China, Africa (via China!) and Russia was going to involve a major re-assessment of financial practices and economic stability. They very much related to the need to be ostensibly less materially-minded and to move away from the pure consumerism mentality.

“Many who seem to be struggling with adversity are happy; many, amid great affluence, are utterly miserable.” Tacitus

The third topic that I selected was that of Culture. I presented this from the perspective of personal culture (including references to uniqueness, brand, values and niche). As a wise man once said,

“A nation’s culture resides in the hearts and in the soul of its people.” Mohandas Gandhi

Once again this resulted in creative debate. If the culture of a country lies in the hearts and minds of its people then my faith in the future was significantly uplifted. The “got it”! They instinctively applied the principle of personal values and ethical behaviour to their own personal “culture” and to that of their peer groups.

If culture is the accumulation of the collective values of one generation past on to the next, and I think that it is as culture forms the framework of society, acceptable behaviour and generally in the laws of the land, then I was left with a slightly bitter taste. Not because of the discussion just completed but because of the culture that we are passing on to this next generation of entrepreneurs and leaders. We have created and perpetuated a culture of “what’s in it for me” rather than one of “how can add value to others”. We have thrown ourselves willingly upon the alter of consumerism. We have over-eaten, over-spent and over-exploited the planet. We have presented many dubious “role models”. We have allowed corrupt officials to bankrupt society. We have lost, or at least stopped deploying, our core, personal values. But there is hope and after all that was all that was remaining in Pandora’s Box when we let out the rest of the evils of the World!

The hope lies in the future. The hope lies in the youth. They are technical savvy, astute, aware and confident – maybe this is the legacy culture that we passing on – a “don’t do as we do but please do as you say” culture. I am very much looking forward to working with the students again; they seem to me to be the light at the end of the many tunnels that we have created.

I have been involved in several small and start up ventures. Some with new or “un-related” partners, some with “friends” and others with family members. I have never, up until this point, thought to compare the relative benefits and challenges of the various constructs. It is tricky enough to start and run any new venture – capital, investment, running costs, salaries, skills , responsibilities, roles, authority, workload, location, strategy etc – but at the end of the day, working effectively with any business partners seems to me to be the essence of all operations.

My extensive time in corporate world presented few of these challenges. Everyone has a defined role with understood responsibilities, rewards and (usually) measurements and feedback systems. Additionally, despite any relative success and failure, in this world the company always owns the job, you as an individual only own your own skills. This introduces levels of detachment that small business, including family operations, are not usually able to offer. Also, even if we hold a position of authority and responsibility, we can effectively go home and switch off. There are resources for each and every activity and a relative detachment from the actual day-to-day finances. Many smaller businesses do not have such extensive procedures and protections in place. They typically limit the “who does what” to informal agreement and understanding. This allows for greater flexibility but can, if not managed effectively, lead to cross-over of activity, decision-making issues and potential rewards disputes. So, given the extensive history of family business and the vast number of family businesses that thrive in the UK, what, if anything, does family business offer that non-family ventures are unable to exploit and can these ventures learn anything from non-family structures and operations?

There are undoubtedly a myriad of specific areas where corporate business is “different” from the smaller concern but I wish to concentrate on what I consider to be some key topics here, most of which concern the “human” element. Assuming that all of the necessary business structure documents have been completed (LLP, partnership, private ltd company etc) where and why can a family business learn or indeed offer lessons?

Structure
Many structures abound but in corporate world roles, titles and responsibilities are clearly defined up front encouraging specialisation and expertise. Many smaller businesses and particularly family affairs leave this expressed structure as implied. This can lead to issues, particularly if the ownership of shares and profits is not also as equally defined.

Authority
Just who is boss? The appointed final decision maker may simply follow the “rules” of sibling-dom – this may not be the best or most effective policy. Just because a sibling (or even parent) is “older and wiser” does not necessarily mean that they are best placed to make all the final decisions.

Skills
Corporates spend immense amounts on seeking the right person for the right role. Family business has an extremely restricted talent pool. You kind of get what you have. Ensuring that the best allocation of duties and roles is critical to success which may not always be an easy task – telling big brother or Dad that you know more or can do better may not go down so well!

Responsibility
In corporate business, everyone should know the exact level and scope of their responsibilities. In a family business there can be a tendancy to blur the lines. This encourages knowledge-spreading and reduces the chance of “silo management”.

Representation
One family member can ostensibly offer the same “face” of the business as any other – the assumption being that one represents all whereas in other businesses there usually exists an understanding and acceptance that sales sell, marketers market, managers manage and directors direct.

Rewards
Again, family business can blur the lines – if the youngest of the family is assumed to be the least experienced and is expected to “defer” then there is the danger that their rewards (shares, revenue, bonus etc) may reflect this as the “natural order” of things. In corporate world, this correlation between age/experience and rewards are very much less defined. Young, talented IT or marketing individuals often commanding far higher salaries than the experienced “old dogs” that have years of experience.

Communication
I guess that it can be assumed that family members communicate but what happens if they do not? In a corporate environment, silo management and internal politics often lead to knowledge storing and internal competition but there does exist a minimum requirement for communication and collective reporting. A family has a massive opportunity here because of the assumption that blood is thicker than water, and usually is, but always be aware that when a family tie breaks there is more at stake than a few spikey internal memos!

The weakest link
Business can develop, manage, train, monitor, assess, appraise, discipline and eject employees. You cant dismiss a sibling! You may be able to remove them or transfer them around the business but a brother is always a brother, a sister a sister and a parent a parent. Any relationship is only as strong as the weakest link and the inability to detach completely the work-role from the family-role may cause problems never dreamed of in non-family business.

I understand that for every “benefit” there can be made a case for the opposing perspective so are there any definitive benefits that a family business can offer that non-family concerns cannot? Maybe. The issue of blood being thicker than water may produce invaluable benefits of natural compatibility – trust, familiarity, communication, tolerance, unity, succession planning, mutual development of skills and the like – but equally they may present challenges that other ventures do not have to face. Sacking a sibling for example or not passing on the family business onto the eldest son (figuratively speaking) irrespective of talent and ability can put pressures on all other members of the company. “Young” Mr Smith may not have anything like the kudos and respect that “old” Mr Smith possesses.

I would personally recommend a family business – to me, the intrinsic familial ties offer benefits (by way of understanding and natural support) that other ventures cannot – a friend is always only a friend, a partner always only a partner, a boss can never be a father. Members of non-family ventures can leave, or change their priorities at their own, detached and personal volition and possess their own natural and understandable tendency to support their own family over and above yours. A family will generally support itself and this united front may be the single, and most defining advantage that any business can possess.

There are many angles on which we could approach the topic of managing through austerity. Indeed, when is enough enough has as many contexts as there are individuals which it affects. There are clearly elements of the reality of austerity that are common even if the actual individual impacts vary.

If you are fortunate enough to not be impacted negatively and are making a prosperous living during times in which many others are struggling, well done. The issue of enough being enough is maybe an issue of considering wants over needs. Do you need that new golf club or designer handbag or all that food in the freezer? Or do you simply want them for what they say about? Do you still need all of those clothes in the wardrobe or could someone else benefit via your own charitable “trickle down” effect? Is £1M enough or do you need more?

For many more of us, and in particular, those of us not living in London or the South West, maybe enough is enough, regarding the imbalance of regional Government funding initiatives or the gap between business support policies and the reality of these policies, in practice, or the incessant propaganda that all the unemployed are job-shy or the fact that we are the most photographed nation per capita in the World?

Your responses to these external issues will be as individual as you are. Or at least they should be. Provided that you are not simply following the trend or blindly complying to rules or conforming for the sake of an easy life, that is to say, playing a role that has been written for you, then you will have an opinion; your own opinion.

So, that said, what makes these issues personal is the way that you integrate austerity into your own world by which I mean, how these issues directly affect your personal circumstances, emotions and behaviour. I can speak with some authority on how I personally behave as I have experience and if you want to know the reality of a situation, ask someone that has been there. I have been there.

I have searched out the yellow label products. I have waited for the end of day product reductions in the Co-op. I have juggled whether to pay the gas or the electricity bill. I have woken each morning with a three second smile and then faced the reality of another stressful day speaking to cash collectors and waiting for the daily incoming red bill post. These things I have done.

How did I manage? Well, with difficulty but with purpose. Despite the days of angst and worry, I kept faith. Only just on occasions it is true, but I kept faith in me (and those treasured few that supported me). Whilst I accept that for many of us work brings pressure and contentment, frustration and joy, ups and downs, the balance of these seems to me to be all the more important during times of austerity. The tolerances are smaller and the returns more fragile or short term. There always seems to be a permanent cloud just sitting in peripheral vision waiting to deliver the next storm.

Whether starting on a new career, accepting that promotion or in creating your own new enterprise, it is undoubtedly tougher in times of austerity. This made me consider many aspects of my life, including financial freedom and to ask myself “What do you want? What are you prepared to do to get it? And ultimately when is enough, enough? In terms of the minimum that I need and the maximum that I want.

I have created the following diagram to explain the principles behind my considerations. I will be expanding upon this in future posts in Ethiconomics but for now I will provide some context and explanation of my thoughts.

faithFaith – we start off in all good (blind) faith, inspired and high with motivation and expectations.

Belief – we add research, feedback and context to our project to turn faith into a qualified belief.

Arrogance – it all seems too easy! Our model works, business/life is good, I can afford to throttle back a bit, I deserve this.

Ignorance – things are trickier but that’s life. Nothing much to worry about, it’s just a bad spell. I am enjoying it (really, overall, well most of it!). Things will get better.

Denial – nothing to see here. OK things are quiet, money is not quite as easy to earn but I am still right and happy. It’s them not me anyway. It’s not my fault.

Folly – I was right before and still am. What I have done before will be as effective again. It doesn’t matter anyway. I do it just because I love it and am not bothered about the money or the stress.

F*ck It – or f*ck it off. If it sustains beyond Folly then you have 2 choices: f*ck it off before it f*cks you up!

Let me qualify. You are responsible for your emotions. You are responsible for your actions. You are in control of when you decide that enough is enough. Clearly this is a simplification but the principles are, I think, appropriate. If you stay within the first three elements, being responsible for your success, listening to feedback, developing your product (or self) and focus on continuous improvement and sustainable growth, then your needs will be met.

If you stray into the further states, you are still responsible but are more likely to be attracting elements of frustration, angst, isolation and stress. You effectively refuse to define and accept when enough is enough. By understanding what are your needs rather than wants are, you are likely to reframe these components of your life into more than to the single aspect of money. Your wealth can be viewed in different terms and, even more importantly, on your own terms.

So, be responsible, be aware of your condition and define your own rules for exactly when (and what) enough is enough.

There is little doubt of the growing trend towards the creation of alternative enterprise models different from the traditional top-down shareholder-driven, financially-oriented shareholder variety endemic in modern Western economics.

As we are aware, shareholder structured organisations traditionally have offered as little legal obligation as is required of them, to what we would nowadays call their other stakeholders. Namely wages to employees, payments to suppliers, supplies to customers and, if absolutely necessary, tax to their Government. And worse, even if there is an acceptance that this model is not entirely equitable, fair, open and honest they are still allowed to pay little more than lip service to societal responsibility, with superficial CSR policies and ineffective environmental regulatory control. And why not?

Many of these organisations were created, built, developed and sustained by private individuals with private enterprise and a huge degree of personal risk. They originally put in their resources, time, energy and funds and they should be allowed to reap their respective rewards. Many of us who have tried to plough the entrepreneurial furrow alone will understand that this simple risk and reward model of the capitalist regime was effective for those lucky few who were successful. For those not, the system offered a simple choice: work for someone else or not at all. Community was something for their social or spare time and the environment was a Government/national issue beyond the remit (and responsibility) of privately owned capitalist enterprise.

Since the back end of the 1990′s, however, and I am aware that some far-sighted individuals and organisations have been operating this way from earlier than that, companies began to account for and manage their relationship with their respective local and non-local environments and communities. The awareness of the effects of harmful by-products, production waste, the depletion of material resources, and overall pollution of the planet moved hand in hand (whether by need or by choice) with a gradual move towards a stakeholder model.

The stakeholder model, and there are various, creates a structure whereby the organisation considers the value and impact of the parties affected by operational activities in addition to the shareholders themselves. Increasingly employees, customers, the supply chain and communities (and those affected by the whole operation and not just those locationally adjacent) in which the company operates and the environment from local to global. All are potentially considered as reasonably and equitably as possible.

But a model can only be truly assessed by its effectiveness, as can organisations, by its sustainable results. The shareholder model did an extremely effective job at increasing capital wealth and in creating financial growth, especially for those in the controlling positions, namely shareholders and senior executives. After all, this was its true purpose. Just as a good idea can only be considered a great one if it delivers its aims, so can a model. Simply expecting a ‘stakeholder models to the rescue’ scenario is naive and ineffective. It is a start, and theoretically speaking a giant leap, but the proof of these entrepreneurial puddings is in their eating.

The stakeholder model as a vehicle for sustainable growth is increasingly practised but, and with particular reference to those ecologically oriented deliverables, the far ranging implications and results of this more expansive approach are yet to be completely understood. Increasingly it is being proven that it is possible to consider employees, customers, suppliers, communities, and natural environment responsibly whilst still generating satisfactory financial results and all at the same time as producing sustainable products and ecologically sound supply chains (or networks). Such enterprises as these are highly efficient, have low costs and pollution levels and deploy alternative renewable energy sources, all of which can be accommodated into any business model, if the intent is present and the vision is clear and the parties supportive

It is vision that is the starting point. In ‘Caledonia’ by Dougie Maclean, he espouses an ethos of ‘a belief in self and country’. I would take this a little further, or actually a little closer. I would suggest an ethos of a responsibility for self and for society. I am aware that whatever the model and the roles contained within it that there lacks a single and uniform definition. What is community? Where is it, who is it? With increasingly diverse and disparate supply chains, internet supported transactions, communication and knowledge-sharing, an enterprises community is almost impossible to define but for me, society brings it closer to home. If you exist you are part of a society. Responsible citizenship cannot happen without responsible citizens and this introduces the second condition, and by far the single most important one, that of responsibility.

Do you need incentive to be responsible?

Do you need to create different levels of personal responsibility based randomly upon where you are sitting and who you are communicating with, at any one particular moment?

Do you need regulations and controls to define your behaviour?

If the answer to any of the above is yes, no matter what the business model, you are avoiding the key issue to all life: personal responsibility. You have the values and you have the choice. you can, at any moment, choose whether to be responsible for your actions, or not and this is completely true independent of whether you are at work, rest or play, so let’s not get too hung up on models. What is important, however, is the knowledge and mutual trust that the stakeholders within business enterprise understand and accept that the vision will be delivered by supportive strategies and responsible transactions. This approach, of personal and social responsibility, may be an anathema to the 90s ‘loads of money’ exponents but so what? What was, is and will be, you will create.

Returning to the shareholder for a moment. Their historic raisin d’être was to lend money to make money. For themselves. The mere fact that these ostensibly capitalist institutions are now re-modelling and marketing themselves as ‘ethical investors’ shouts loudly of their recognition that we, the entrepreneurs of today and the future, require more from them and that we have more choice. This recognition is in itself is a step forward but one that adopts the traditional approach. They loan, you borrow. They charge, you pay. You struggle, they watch. Surely there is something better, an ‘adjacent possible’, as one of my colleagues, Chris Cook of the UCL Research Institute calls it. And there is. There are business funding and refinancing models that treat shareholders as stakeholders, no more or no less significant than the other business stakeholders and because they are ‘inside the bubble’, along with the other parties, then adversarial contracts and conflicting objectives can be kept to a minimum.

A final word on social enterprise. I have written about this expansively before, so suffice to say that still today there is not enough commercial in social enterprise and not enough social in commercial enterprise. There are still too many good ideas masquerading as valuable ones relying on external funding, loans, grants and good will. Not only are they operating with commercial ineffectiveness but they are attracting and swallowing up funding and support for those genuinely competent organisations that have social responsibility in their respective visions but also within the actual operational strategies. These are the sustainable organisations of the future, these are the responsible entrepreneurs of the future.

Whilst social impact needs to be built into any and all enterprise structure irrespective of the model, so does commercial responsibility need to be managed more effectively in any and all ‘social enterprise’ organisations.

I am a committed supporter of life long learning. This is not something that my school teachers would necessarily have expected, my being one of those “could do better” pupils but nowadays I am something of an advocate of business and personal development guru Brian Tracey’s view, namely:

“Invest three percent of your income in yourself (self development) in order to guarantee your future.”

Like me, he sees learning as an investment. An investment in you; an investment policy drafted to protect against the risks of change or, even better, a strategy for you to be the agent of change itself. Learning is life insurance.

You should, in fact, try to learn something new every day. This need not necessarily be a formal training course, but an awareness that someone or something can add to our data bank of knowledge every single day, every single event. You may be surprised to know that simply by being more “in the moment”, by paying better attention, by asking better questions and by deploying better listening skills, you can learn something new every day. This, however, I see simply as life learning. You can choose to do this or not from one moment to the next and then assess whether there is value in these knowledge-bites for you to store and apply as and when appropriate. How somebody else deals with a situation or how they construct their sentences or fact-oids with which you can simply increase your score on TV quiz shows. All learning increases knowledge and all knowledge is power. You choose how to use this power.

From a professional perspective there exist more compelling reasons, however, that are particularly pertinent in days like these; days of redundancy threats, down-sizing, outsourcing and Government intransigence. Professional learning is investment not expense; protection against these ravishes of austerity or future job market developments. I will draw upon a familiar analogy to illustrate:

1. A new string to your bow, non-core knowledge. By adding complimentary knowledge to your skill set and personal portfolio you are able to:

a. Create a broader context for the application of your core skills
b. Provide a greater contribution by way of understanding better where your key skills fit into a project as a whole
c. Understand better where the skills of others are appropriate and relevant
d. See your own offer from the perspective of other contributors and/or competitors

This will allow you to improve the contextual relevance of your own offering and to apply it better across more varied sectors.

2. Stand closer to the target, core skills development. By focussing on learning and the development of skills within the area of your current expertise you can:

a. Become the guru and the only go-to guy for industry comments, strategy and advice
b. Increase your market value with recognised qualifications and/or your own cutting edge papers, policy and products
c. Set the trends within your market/company rather than following them

This will encourage people to see you as the expert by developing a niche u-s-p. Closer to the target you are infinitely less likely to miss!

3. Buy a new bow, alternative and unrelated learning. There is no reason to stick with what you know. In fact, I personally prefer not to; to be a generalist rather than a specialist:

a. Change will happen anyway; why not steer your own ship?
b. Just because you are good (or paid for or familiar with) at one thing should not stop you from trying others
c. No matter how good you are, you cannot know everything about any single topic; life changes, knowledge changes and the value of you and your current skills will change

Step out of your historic comfort zone; try something that you liked at school, try something random or abstract. If nothing else, this will expand your life experience and, the chances are, make you a more interesting person to be around.

You can. Of course, just learn for the fun of it. For the sheer joy of it! You do not need to restrict learning to work or job related activities and by learning non-work skills you may even provide yourself with a mental and emotional (and physical) diversion from the stress and mundanity of how you earn your living. Yes I know, if we love our work then its not really like working but how many of you can actually say that you love everything about your work? Or indeed that you actually like it at all?

The days of 25 year career paths and golden watches have gone. Labour is (hugely inappropriately and incorrectly) seen as a resource rather than an asset, to be used up and exhausted, depreciated and replaced with a more cost effective product rather than invested in and allowed to appreciate. Life long learning is investment in this asset be it, you or your staff.

My advice is simple but, unfortunately, not unique; Learning IS life and, as a far more learned chap than I put it:

“once you stop learning, you start dying.” Albert Einstein

So get out there and learn something new; it may possibly save your life.
This article was published in the3rdimagazine on 4 July 2013

Anyone who read my piece a few issues ago, on quotas, will understand my position on forced discrimination and so may be able to predict my starting position, regarding preferential treatment for the prioritised funding of women-led businesses.

This does not mean that I am against balance, equity and fairness, in fact the opposite is true. I am absolutely in favour, passionately, of all of these values. I can, if requested, provide examples from my own work that support my position.

Now, I would like to take this discussion a step further, or at least broader, in this piece.

So, to the question of funding. Should women’s enterprise and/or women-led business propositions be given preferential treatment for Government funding and loans? Unsurprisingly I respond in the negative; and why?

Firstly, I do not believe in discrimination in any form, positive or negative. If one wants to change the image seen in the mirror, one deals with the source and not the reflection. I do believe that by creating a system as unfair and biased as the one we are trying to change, the perceived “boys club”, by creating a “womens club” is fundamentally wrong. What I am talking about here is the method of achieving balance, not the issue itself.

Should there be more diversity on Boards? Yes. But this is NOT simply an issue of forcing the inclusion of just women; how many Boards are reflectively multi-cultural or multi-ethnic in proportion to our society? Women are NOT the only group “excluded” from these elite boys gangs, the vast majority of men are too. In fact, I know many men who choose NOT be part of these testosterone-filled, red-braced alpha-male cliques. Unfortunately, in my experience, it is usually the good guys that avoid these groups and for many of the reasons that we are trying to encourage: equity, fairness, trust, respect and authenticity. Not all men are stereotypical “blokes” or alpha-males; many are caring, compassionate, excellent communicators, empathetic and fair.

From a funding perspective, surely the funds should be channelled to the most socially-beneficial and value-driven business propositions. A business that adds value to, not only its shareholders or owners, male or female, but equally to its customers and community, its staff, its environment and through its supply chain. A business that is not only marketing itself as ethical or social, but one that has firm and ratified social benefits formalised and legislated within its operations and activities and not just in its PR releases?

If we are to discriminate positively on which businesses receive support, then surely our terms of reference need to be socially-positive across all stakeholders and NOT simply because the Executive is made up of one specific gender or the other.

Any investor will require a return. Surely it would make more sense and add more value to more people if we required all business loans (Public and Private) to be formally tied into community, civic, social and environmental benefit. Common Wealth, if you will. This way, the most social/community beneficial business enterprises will attract the most funding and investment; once you realise that sustainability is NOT just about being “green” but about long term satisfaction of ALL stakeholders, equally, ethically and equitably, then it is easy to see that this is a fundamentally better way to achieve balance and effective diversity in society as a whole and not just within sections of it.

Many good business ideas require funding to start up. Discriminating which get funding by virtue of the gender of the entrepreneurs presenting the proposition is a fundamentally flawed premise. Private business has to make surplus to survive in the long term. How the surplus is made and how it is distributed is surely a better place to start any investment assessment. If you do not operate efficiently and profitably as an enterprise and are permanently dependent upon external financing, the chances are that you are a charity or a hobby. Both of which are essentially “good”, but they are not commercial enterprises. The solution is to make commercial enterprise more socially accountable and, in fact, social enterprise more commercially aware. More ethically-oriented business models are required that incorporate genuine and lasting change for Common Wealth; enterprise models that we can all contribute to and benefit from.

The above paragraphs refer to private business enterprise. Maybe the answer to our question lies elsewhere, or at least in the first instance? Maybe the first steps to delivering real diversity lies within the Public Sector. Private enterprise is just that, private individuals seeking private rewards from essentially private investors. These ventures will select the best resources for their respective aims and if a particular proposition, person or cause, merits their priority, they do have the fundamental right to choose that resource. You do, I do, and they do. THIS is the free market.

In the public sector, however, their raison d’etre is to serve the public. It is potentially the ideal environment in which to encourage full diversity and representation. So too our political organisations. So why is it that these hallowed institutions are not leading the way? Why is the Cabinet mainly men? Do all local Council Executives reflect their respective societies? If not, why not? We vote for them don’t we? We can directly influence the membership can’t we? Is it that these, our public servants and representatives, are not themselves reflecting our true wishes for equality and fairness? Or is it that women do not see these roles as attractive or influential? I don’t know but I do think that there are valid and valuable questions to be asked in this environment as much as there are to questioning the mix of private enterprise Board Rooms.

Finally, and I hope to lighten the tone a little, I would like to finish with a quote that I heard on the Radio recently from comedian Ed Byrne (I think!). The discussion was on this topic, or women’s representation in the Boardroom anyway, and the comedian made this point when asked about the glass ceiling or the sticky carpet, as it has become termed (I paraphrase):

“…the thing is about this glass ceiling is that if its true, at least women have a valid excuse for not reaching the top; me, I wake up every morning to the damning realisation that I am not Alan Sugar and I have no excuse for not being like him.”

The National Centre for Diversity details its mission as being “to encourage and enable organisations to adopt and develop behaviours and practices which promote inclusion, equality, diversity and achievement.”

They continue, “By understanding the different needs of your stakeholders whether they are employees or customers, or the many other groups that your organisation comes into contact with, we can help you recognise, adapt and enhance your culture to instigate positive changes.

By committing to embrace diversity you will see many business benefits which range from meeting legal requirements, reducing staff turnover and enhancing new product development.”

Diversity is as much a social and cultural issue as it is specifically in the workplace; clearly there are parallels. One can only recruit, for example, from those individuals who express an interest in a position with your company. You can only assess the appropriateness of the candidates that wish to be considered. When considering the strict laws and regulations regarding how we word and position vacancies in order that we specifically do not exclude minorities and, by definition, open the vacancy to the full diversity of our culture as a whole. If we are to accept that diversity is still an issue then we are led to two conclusions: either that the multi-cultural groups (race, gender, religion etc) are just not attracted to the positions and roles that we make available or that we ourselves do not positively act to create diversity in our own business enterprises.

I leave you for the moment with that thought.

Maybe it is worth considering real diversity from a less contentious perspective; let’s call it balance. Do you have a balance of stakeholders? Specifically, are your own client base, supply chain, investors, community and employees socially or culturally diverse? Do you yourself have a balanced enterprise?

Maybe, maybe not. So, if not, what are you doing about it? What can you do about it? A relatively simple, manageable and authentic first step would be to review your stakeholders as individual groups? Where is your investment capital coming from? The white, upper/middle-class male controlled banking system? Middle Eastern angel investors? Overseas investment trusts? Women-only funding organisations?

And your supply chain? Do you really exercise as much diligence in investigating an ecological and cultural balance when purchasing your business services or personal expenditure? Where exactly DO those trainers come from? Where is that leather jacket sourced? Who really gets the equitable recompense? And that call centre that you refuse to call because you cannot understand the dialect of the agent?

And so to closer to home, your employees. Are they all from a similar social and ethnic group? Are they all the same gender, for example. Do you get a balanced and diverse input from your team in order that you can make the most informed decision or is the only diversity on your team based upon skills set and experience: functional diversity is NOT cultural diversity.

Assuming that you are satisfied that after reviewing your own stakeholder mix that your enterprise fairly represents a diverse and balanced group, does this merely represent a balance beneath the psychopath? By this I mean that it is all well and good having diversity in place by quota, although I understand the logistical difficulties in achieving and maintaining this, but just how do you incorporate this diversity into the business operations and culture?

I understand that the Board of Lloyds TSB, yes the bank that we bailed out as taxpayers to the tune of over £46Bn, was made up of the predictably middle-class pin-striped brigade. All masters in their respective functional fields I am sure but guess what? It made no difference because the man at the top ignored their views and recommendations and bought the Scandinavian bank anyway with the consequences that we are all now living with.

My point here is two-fold; firstly, that it matters not a jot who and from which group your employees, partners, advisors and such come from if your are going to ignore them anyway and secondly, would it have actually made any difference if the Board WAS culturally and socially diverse? In this particular instance, I suspect not as Mr Goodwin was clearly on an unstoppable, unregulated ego-trip. “Too big to fail”? Ha! Clearly not.

There are, however, techniques and methods that eradicate, or at least mitigate to some degree, the impact of the Boardroom psychopath. Co-operative business models, like here at the 3rdi magazine, formally incorporate democratic voting processes for all members, not just formal employees. We have no restriction as to where we distribute our journal (other than the content being specifically marketed at the professional female business woman – mmm, is THIS an affront to diversity), nor who reads and comments, nor on the cultural or social source of any articles. If you do not favour the co-operative enterprise model then by using more open and inclusive decision making methods you may introduce perspective and solutions previously unavailable to you. Sociocracy, for example.

Sociocracy is described as a system of governance using consent-based decision making among equivalent individuals and an organisational structure also known as Circular Organizing, (based on a recent implementation of sociocracy by Gerard Endenburg) was developed as a new tool for governance of private enterprise, but has been adopted in many different kinds of organisations including public, private, non-profit and community organizations as well as professional associations. Using such principles as consent rather than consensus, transparency and interdependence, sociocratic organisations are claimed to be a more efficient and effective decision-making method than autocratic decision-making, because it builds trust and understanding. The process educates the participants about the needs of the other members in doing their work effectively as well as their psychological and social needs as human beings.

My final point is this: we are all, I assume, trying our best, but often it is easier to analyse a remote situation than it one that we are in the middle of. If we live and work in a predominantly white, middle-class, middle of the road environment then this will influence our personal culture, preferences and education. If our environment is diverse, multi-cultured, many faceted and we are intent on achieving balanced input, then this too will reflect our business culture.

Diversity, speaking from a pure Ethiconomics perspective is NOT just about getting more women on the Boards of big companies. That IS important, vital even, but to me it is more about creating balanced input, balanced viewpoints, balanced perspectives and a balanced enterprise. I very rarely advocate forced change. Empathetic, considered, equitable opportunities, yes. The creation of diverse stakeholders for these digitally enhanced multi-cultural times, yes. Inclusive, non-adversarial agreements and contracts, yes. A Boardroom environment of rich cultural, gender and social diversity where the psychopath is removed and the creativity of the innovators is released? Very much yes.

So I will leave with a final thought regarding a discussion that I have had several times recently regarding another commercial zeitgeist: that of trust and transparency. How many headlines and journalists, experts and commentators cry war on the lack of both. We need more transparency. We have lost all trust.

My simple view is this, if we have total transparency, we need no trust, and if we have total trust, we need no transparency. What we DO need is not more Government regulation but more personal regulation; personal responsibility in act and thought. If there was an enforced legal requirement for you to be investigated for your own enterprise’s diversity policies, across ALL stakeholders, just how compliant would you be?